DECA+ Business Management and Administration Practice Exam

Which term describes a distribution channel where the goods move through intermediary members?

1. Direct Distribution

2. Indirect Distribution

3. Vertical Distribution

4. Horizontal Distribution

The correct answer is: Indirect Distribution

The term that describes a distribution channel where goods move through intermediary members is "Indirect Distribution." This concept refers to the process of distributing products through third parties, such as wholesalers, retailers, or agents, rather than directly from the producer to the consumer. In indirect distribution, these intermediaries play a crucial role in making the products accessible to a broader audience, managing inventory, and providing sales support. This distribution method can enhance efficiency by allowing manufacturers to focus on production while intermediaries handle the complexities of sales and distribution. Direct distribution, in contrast, involves the producer selling directly to the consumer without any intermediaries, which may limit market reach. Vertical distribution refers to a system where multiple levels of the supply chain are involved but is not limited to the concept of intermediaries. Horizontal distribution does not convey the movement of goods through intermediaries but rather indicates the spread of products across similar levels in the distribution chain.